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The Home Office has announced the details of the eagerly anticipated changes to the Tier 2 visa category, following the publication of the recommendations of the Migration Advisory Committee (MAC) review of Tier 2, which was covered in our article of 20th January of this year.

Quite surprisingly for the majority of the legal professionals and commentators, the government did not just follow the entirety of the MAC recommendations, instead adopting a more conservative approach (pun intended), particularly when it came to the changes which would affect businesses in the UK most significantly. The government appears to have taken into account the concerns raised by business leaders and has decided against introducing some of the most restrictive MAC recommendations.

It appears that the changes will be introduced in two stages, first in October 2016 and second in April 2017. These are set out briefly below:

Tier 2 Visa (General) Changes

  • The government will increase the minimum salary threshold to £25,000 in October 2016 and £30,000 in April 2017 for experienced workers, whilst maintaining the current threshold of £20,800 for new entrants. Certain professions, such as nurses and teachers in certain subjects will be exempt from the new threshold until 2019.
  • Resident Labour Market Test (RLMT) will be waived from April 2017 in a certain case, for example to applications associated with the relocation of the high-value business to the UK, or potentially, supporting an inward investment into the UK.
  • From October 2016, requests for restricted Certificates of Sponsorship for overseas graduates will be given priority. Graduates from UK universities will continue to be exempt from residence Labour Market Test (RLMT).
  • From April 2017, sponsors will have to pay the Immigration Skills Charge (ISC) at a rate of £1000 (£364 for small and charitable sponsors) per person per year. There will, however, be an exemption for PhD-level jobs and more importantly for students switching from Tier 4 to Tier 2 (General).

Tier 2 (Intra Company Transfer (ICT) Changes

  • The government will introduce a single ICT route with a minimum salary threshold of £41,500 for all Tier 2 (ICT) Migrants except graduate trainees, who will have their own route with a salary threshold of £23,000 and an increased limit of 20 places per company per year. The Home Office will abolish the Tier 2 (ICT) Skills Transfer category in October 2016 and Tier 2 (ICT) Short Term in April 2017.
  • Tier 2 (ICT) migrants will be required to pay the Immigration Health Surcharge (IHS) from October 2016, currently at £200 per year of leave granted.
  • From April 2017, applicants (other than the Tier 2 (ICT) Graduate Trainee) with an annual salary over £73,900 will not be required to have one year’s experience working for the sponsor outside the UK before applying.
  • From April 2017, the high earner’s threshold will be reduced from £155,300 to £120,000 for Tier 2 (ICT) migrants looking to stay in the UK for a period of between 5 and 9 years.
  • The Immigration Skills Surcharge will also be levied on Tier 2 (ICT) category.

Although these changes do not appear to affect the brass tacks of Tier 2 category, the changes are significant and will make this category much more expensive for the companies in the UK wishing to hire a foreign talent. This is mainly due to the introductions of the minimum salary thresholds and additional sponsor charges. It remains to be seen whether these restrictive changes will achieve the government’s ultimate goal of reducing the net migration. Though, we all probably know the answer already.

As always, lawyers at Edmans & Co will continue monitoring the situation. Contact us if you have any queries regarding Tier 2 application.

Emil Manasyan of Edmans & Co

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